Huw Evans, Director General of the Association of British Insurers (ABI), has urged the UK Government to delay the UK’s planned withdrawal from the European Union (EU) in order to avoid a no-deal scenario, which he claims would be “an unforgivable act of economic and social self-harm that the UK would live to regret.”
Speaking at an ABI’s Annual Dinner in London tonight, Evans will tell attendees that, with time running out, Brexit should be subject to a short delay “as a last resort” if no-deal is the only alternative.
He will also warn that any future arrangement with the EU that requires the UK to comply with rules it has no say over could be “weaponised by those in the EU that want to … damage the UK.”
This could result in UK re/insurers having to hold more capital than they need, which would damage competitiveness, reduce investment in the economy, and see people get less from their pension, he will argue.
Evans’ remarks at the dinner, which will be attended by heads of major re/insurers, senior politicians and regulators, will be made in light of new figures that show the UK insurance industry now has a £16.7 billion export surplus, with over a third of this going to the EU.
“As an industry we have done everything possible to prepare for no deal, including transferring an estimated 29 million insurance contracts and the establishment of nearly 40 EU subsidiaries and branches to minimise disruption to customers,” Evans will explain.
“But we still believe very strongly that a conscious decision to opt for no deal would be an act of economic recklessness our great country would live to regret with WTO rules offering little to no protection against the consequences.”
The World Trade Organisation framework is designed to provide a mechanism for states to resolves trade disputes, not as a safety net for one of the world’s largest economies leaving the world’s largest trading block, Evans will warn.
“We have to keep reminding ourselves that it is the agreement on our future economic relationship that we will have to live with for decades to come, not the divorce arrangements. And here, we continue to face a wholly unacceptable risk that we could end up long-term rule-takers of the trading block we have just left,” he will say.
“It would be naïve to think that over the course of the next few decades, EU rules will do anything other than reflect the interests of its members, not its former members, seeking to draw capital, talent and market infrastructure into the EU27 and removing much that only ever went into EU law because of UK needs.
“I cannot think of many countries in the world where some of its leading politicians would openly contemplate signing up one of its world-leading sectors to decades of rules made by our competitors. Whatever we eventually agree on our future relationship, that must not be allowed to happen.”